The budget process in South Africa is one of the most critical functions of Parliament, ensuring government spending aligns with national priorities while maintaining accountability and transparency. This guide provides an in-depth look at how the budget process works, the different stages, and the role of Parliament and the public in shaping it.
1. What is the Budget Process in Parliament?
The budget process is a structured cycle where government revenue and spending are planned, debated, and approved by Parliament. While the Minister of Finance presents the annual budget, it is not a final decision but rather a proposal that undergoes extensive scrutiny, debate, and possible amendment before it is approved.
The budget is not a single document but rather a set of interrelated budget instruments that go through various parliamentary and public processes before becoming law.
2. What are the key stages of the budget process?
The budget process occurs in different key stages:
Drafting & Planning (Formulation Stage)
The National Treasury issues spending guidelines.
Government departments submit draft budgets based on these guidelines.
Parliament provides oversight through committees and budget review reports.
Legislative Process (Approval Stage)
The Minister of Finance tables the budget in February.
Parliament scrutinizes and debates the budget.
Public consultations take place before the budget bills are passed.
Implementation
Once approved, the budget is implemented.
Government departments use the funds for programs and services.
Parliament monitors spending through oversight committees.
Auditing & Assessment
- The Auditor-General reviews government spending.
- Parliament holds departments accountable for financial performance.
- Reports are published, and corrective actions are taken where necessary.
3. Now that the budget has been tabled, when do Members of Parliament (MPs) vote on the budget bills?
MPs do not vote on the budget as a single document but rather on different budget-related bills that follow a structured process.
4. In what order does Parliament vote on budget-related bills and other tabled budget instruments?
The budget bills and other budget instruments tabled by the Minister are considered in the following order:
Fiscal Framework and Revenue Proposals
Establishes economic policy and revenue projections.
Sets the overall limits for government spending.
Division of Revenue Bill
Determines how funds are shared between national, provincial, and local government.
Appropriation Bill
Allocates money to specific government departments and programs.
Each bill and instrument must be passed before moving to the next stage.
5. What happens if the budget is not passed by April 1?
If Parliament has not passed the budget by April 1, the Public Finance Management Act (PFMA) allows government spending to continue based on the previous year's budget allocations.
However:
The Fiscal Framework should ideally be passed before April 1.
Government can continue spending as prescribed by the PFMA while awaiting final approval.
6. Is there a set timeframe within which Parliament must vote on the budget?
Yes. The Money Bills Amendment Procedure and Related Matters Act provides specific deadlines:
The Fiscal Framework and Revenue Proposals must be adopted within 16 days after the budget is tabled.
The other bills/instruments follow a sequenced process to ensure completion before the new financial year takes full effect.
Some flexibility exists if delays occur.
Government Spending Before Budget Approval
7. When does the provision allowing the executive to spend up to 45% of the previous year's budget take effect?
The PFMA allows the executive to continue spending temporarily based on previous allocations until Parliament approves the new budget. This provision ensures that essential government services continue without disruption.
8. Can MPs vote on departmental budgets in May if the overall budget framework has not been approved?
Yes, some votes--such as the Division of Revenue Bill--can happen in May, even if other budget parts are still being finalised.
Voting follows strict legal procedures:
Fiscal Framework and Revenue Proposals: One-third of MPs must be present, and a majority of those present must approve.
Division of Revenue and Appropriation Bills: At least 201 MPs must be present, with a majority vote required for approval.
9. Can the government start spending based on the new budget if Parliament has not approved it?
No. Until Parliament approves the budget, government spending must follow the previous year's allocations. The government can not implement new budgetary allocations without approval.
Legislative Considerations and Amendments
10. When do MPs vote on the Fiscal Framework?
The Fiscal Framework should be adopted within 16 days after being tabled. However, the law provides flexibility if delays occur.
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11. Can Parliament change the budget?
Yes. Parliament has the power to amend the budget, but any changes must:
- Comply with the Money Bills Amendment Procedure and Related Matters Act.
- Consider government priorities, economic stability, and spending limits.
- Parliament uses the Budgetary Review and Recommendation Reports (BRRRs) to suggest amendments.
12. If the budget is rejected after April 1, does the executive have to repay any money spent?
No. If the budget is delayed:
- The government continues spending under legal provisions.
- It works like an overdraft until Parliament finalizes the budget.
- No actual "repayment" occurs, but adjustments may be made to align spending with final approvals.
13. How does VAT fit into the process if the budget is delayed or amended?
Any changes to VAT or taxation do not require direct repayment. Instead, tax adjustments follow the Taxation Laws Amendment Bills, which guide revenue collection.
Any new tax rates or adjustments are applied prospectively once approved.
